The increase in claims for whiplash is the main reason for the growth of motor insurance premiums, according to a report releasd today by the House of Commons Transport Committee.

The committee’s chairman, Louise Ellman said whiplash claims were expensive for insurers to challenge and diagnosis ‘often subjective’. ‘Although we strongly support access to justice, drivers should not be railroaded by cold callers into launching legal action. The insurance industry must abandon sharp practices that push up premiums such as passing drivers’ personal data to other parties or taking secretive referral fees from solicitors, garages and car hire firms.’

Her report found that the increase in accident claims, predominantly whiplash, was ‘the main reason for the rise in premiums’.


According to the report:

  • Quoted premiums continued to rise, but more slowly than before. The AA reckoned that the average of the lowest three quotes from 90 providers (the ‘shoparound’ average) for comprehensive cover increased by 39.3% in the year to October 2010. The AA’s shoparound average fell by 0.3% between the second and third quarters of 2011, although the annual rate of increase remains well above inflation at 16.4%.

From conclusions:

  • Whiplash: ‘Where someone can demonstrate that they have suffered an injury, including whiplash, as a result of a road traffic accident for which they were not fully liable they should be able to claim and receive compensation. However, in relation to whiplash, we are not convinced that a diagnosis unsupported by any further evidence of injury or personal inconvenience arising from the injury should be sufficient for a claim to be settled. In our view, the bar to receiving compensation in whiplash cases should be raised… If the number of whiplash claims does not fall significantly… there would in our view be a strong case to consider primary legislation to require objective evidence of a whiplash injury, or of the injury having a significant effect on the claimant’s life, before compensation was paid.’
  • Referral fees: ‘We welcome the Legal Services Board’s new guidance on the transparency of referral fees, [but] it does not go far enough… we are disappointed that the Government has not given a stronger signal that more transparency is necessary… . We also call on the Government to initiate an investigation of cold calling intended to generate personal injury claims, with a view to examining the legal and regulatory options for curtailing this activity.

Author: Jon Robins

Jon is editor of the Justice Gap. He is a freelance journalist. Jon’s books include The First Miscarriage of Justice (Waterside Press, 2014), The Justice Gap (LAG, 2009) and People Power (Daily Telegraph/LawPack, 2008). Jon is a journalism lecturer at Winchester University and a visiting senior fellow in access to justice at the University of Lincoln. He is twice winner of the Bar Council’s journalism award (2015 and 2005) and is shortlisted for this year’s Criminal Justice Alliance’s journalism award

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